Fares on India's railways are being raised across all classes this month for the first time in a decade as the government tries to prop up the ailing transport system.
The passenger fare increases, which come into effect from January 21, include rises of up to 38 per cent on some prices.
Losses on passenger travel for India's railways rose to more than 199 billion rupees (Dh13.3bn) between April 2010 and March 2011, up from 61bn rupees in 2004 to 2005, Pawan Kumar Bansal, the Indian minister for railways highlighted.
Passenger fare losses are expected to reach 250bn rupees in the current financial year, which runs until the end of March.
"Input costs have increased by 10.6 per cent per annum between 2004-05 and 2010-11, whereas fares stagnated or were reduced in lower classes aggravating passenger losses," according to a government statement.
The hike is projected to raise 66bn rupees a year for Indian Railways.
"Railway infrastructure was in dire straits and the increase in the passenger fare was necessary to bring the railway back on track," said Rajkumar N Dhoot, the president of the Associated Chambers of Commerce and Industry of India. The association said that such an increase was inevitable amid rising costs.
"To make railway viable and a growing enterprise, the government should not shy away from increasing the tariff as and when necessary," said Mr Dhoot.
Indian Railways is owned and operated by the central government. It is 160 years old and has more than 114,000 kilometres of track running through 7,500 stations. It is the world's fourth-largest rail network.
The railway network, long considered the backbone of India's transportation system, has come under fire for concerns surrounding safety, hygiene and deteriorating infrastructure.
There were several train accidents last year, including one in Penukonda, Andhra Pradesh, which killed 25 passengers and injured more than 70.
"For several years no effective increase was made in the railway passenger fare for political interest that led to deterioration in services as well as compromise in safety measures," said Mr Dhoot.
The statement from the government said it was "also necessary to [raise fares] in the overall interests of this critical infrastructure as well as its users on a sustainable basis".
All fares are also going to be in multiples of 5 rupees when the increase comes into effect.
The move to raise fares, which comes ahead of India's Union Budget next month, is considered to be a continuation of the government's move in recent months to introduce a series of economic reforms in an effort to boost the country's slowing economic growth and reduce its deficits.
These have included opening up the retail sector to foreign direct investment of up to 51 per cent in supermarkets, as well as allowing foreign airlines to buy stakes of up to 49 per cent in Indian carriers. The government also raised heavily subsidised fuel prices in September.
